Dive Brief:
- Applications for unemployment insurance fell 1,000 to 213,000 during the week ended on March 7, countering recent signals of a dimming outlook for jobs.
- Continuing claims also declined, the Labor Department said Thursday, easing from 1.87 million to 1.85 million during the week ended Feb. 28.
- Despite signs of low layoffs, “the continued weakness of measures of hiring suggests that slack will continue in the labor market, with new entrants — not captured in the claims numbers — especially struggling to find work,” Pantheon Macroeconomics Chief U.S. Economist Samuel Tombs said in a note.
Dive Insight:
U.S. companies for several weeks have adjusted to the murky outlook from tariffs, slowing economic growth and mounting geopolitical tension by curtailing hiring and limiting layoffs, according to economists at the Federal Reserve and private-sector organizations.
Top executives at many of the largest U.S. corporations cautiously approach changes to staff levels, “with as many CEOs planning to reduce employment as increase it,” Business Roundtable CEO Joshua Bolten said in a statement Wednesday.
Several well known companies such as Amazon, Meta, UPS and Oracle Corp have announced layoffs this year, giving an impression of a shaky job market.
Indeed, data released last week showed that the economy unexpectedly lost 92,000 jobs in February.
Job losses spanned the full range of industries — from manufacturing and warehousing to transportation and healthcare — and nudged up the unemployment rate by 0.1 percentage point to 4.4%, belying a view among many Federal Reserve officials that the labor market is firming.
At the same time, optimism among CEOs rose this quarter, with many forecasting higher sales and planning to boost capital expenditures during the next six months, the Business Roundtable said Wednesday.
The Federal Reserve next week will assess the mixed signals from the job market while considering the risk that the Iran war will further push up the price of oil, fueling inflation and slowing economic growth.
Traders in interest rate futures, responding to the risk of a war-induced surge in price pressures, have increased the odds that the central bank will forgo trimming the benchmark interest rate through October.
Hopes for lower borrowing costs dimmed Thursday after Iran’s new leader, Mojtaba Khamenei, affirmed plans to bar shipments of oil and other goods through the Strait of Hormuz.
The probability that the Fed will hold the main rate at its current level beyond its scheduled Oct. 27-28 meeting rose to 54.3% from 25.5% on March 5, according to interest rate futures tracked by CME Group’s FedWatch Tool.
The federal funds rate is currently set at a range between 3.5% and 3.75%.
